Anika Begay
Pursue the sale of the going concern
Ensures the commitment to the debtor’s financing in possession to support the operations
Continue to serve customers and provide a wide range of hard and soft surface flooring both online and in stores
RICHMOND, Va.–(BUSINESS WIRE)–LL Flooring Holdings, Inc. (LL Flooring or the Company) (NYSE: LL), today announced that the Company and certain of its subsidiaries have commenced a voluntary Chapter 11 reorganization proceeding in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court). LL Flooring intends to use this proceeding to pursue a going concern sale of its business.
LL Flooring is generally operating in the normal course of this process and remains focused on providing customers with a broad range of hard and soft surface flooring and an exceptional shopping experience. The company has more than 300 current stores across the United States that, along with its online platform, are open and continue to serve customers with few changes to store operations and policies. Additionally, LL Flooring has entered into an agreement with Hilco Merchant Resources, LLC, to assist the company with the store closing sales recently initiated at 94 of its locations. Those 94 stores will remain open and serving customers during this closing process.
Prior to filing for Chapter 11, the Company conducted extensive marketing of its business and certain of its assets, including its distribution center in Sandston, Virginia. The marketing generated significant interest, and the Company intends to use these Chapter 11 proceedings to continue pursuing a going-forward sale of its business under the Bankruptcy Code. The Company remains in active discussions with multiple bidders and hopes to obtain Bankruptcy Court approval for a sale of its business in the early weeks of Chapter 11 proceedings.
LL Flooring has received a commitment for up to $130 million in debtor-in-possession (DIP) financing from its existing banking group led by Bank of America. Following court approval, the incremental liquidity provided by the DIP financing, combined with cash generated from the Company’s ongoing operations, is expected to support the business during these proceedings.
Charles Tyson, President and CEO of LL Flooring, said: After extensive efforts to improve our liquidity position in a challenging macroeconomic environment, it has been determined that initiating this Chapter 11 process is the best path forward for the Company. Today’s step is intended to provide LL Flooring with additional time and financial flexibility as we reduce our physical footprint and close certain stores, while pursuing a continued sale of the remainder of our business. As we move through this process, we are committed to continuing to serve our valued customers and working seamlessly with our suppliers and partners. I am grateful to our associates for their continued hard work in providing the best experience to our customers.
LL Flooring has filed a series of customary motions in connection with the Chapter 11 proceedings. Once approved by the Court, these motions will allow the Company to smoothly transition its business into Chapter 11, including, among other things, granting permission to continue paying wages and maintaining health care and other benefits, as well as other relief customary in these circumstances. The Company has requested permission to continue honoring customer commitments, subject to certain changes in store operations or policies relating to the acceptance of customer deposits and gift cards. Any updates to store operations or policies will be posted on the Company’s website, where customers can also find a list of locations conducting store closing sales. The Company intends to pay vendors and suppliers in full on their usual terms for goods and services furnished as of the date of the Chapter 11 filing and has requested the Court’s approval to do so.
Additional information about the Company’s Chapter 11 proceeding is available at www.LLFlooringRestructuring.com.
Case documents and other information related to the proceeding are available on a separate website maintained by the Company’s claims agent, Stretto, at https://cases.stretto.com/LLFlooring; by calling Stretto representatives toll-free at 855-314-5841 or 714-716-1925 if calling from outside the United States or Canada; or by emailing Stretto at TeamLLFlooring@stretto.com.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor, Houlihan Lokey (NYSE:) is serving as financial advisor and AlixPartners LLP is serving as restructuring advisor to the Company.
About LL Flooring
LL Flooring is one of the nation’s leading specialty hard surface flooring retailers with more than 300 stores nationwide. The company strives to provide the best customer experience online and in-store, with more than 500 varieties of hard surface flooring featuring a range of quality styles and on-trend designs. LL Flooring’s online tools also help customers find the right solution for their envisioned space. LL Flooring’s extensive selection includes resilient waterproof hybrid flooring, waterproof vinyl plank, hardwood and engineered wood, laminate, bamboo, porcelain tile and cork, with a wide range of floor enhancements and accessories to complement, as well as carpet in select stores. LL Flooring stores are staffed with experienced flooring professionals who provide consultation, Pro Partnership Services and installation options for all LL Flooring products, most of which are in stock and ready to ship.
Forward-Looking Statements
Certain information contained in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the Asset Purchase Agreement and Chapter 11 proceedings and any other statements that refer to our expected, estimated or anticipated future results or that are not based solely on historical facts. Such statements, which may be identified by words such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “assumes,” “believes,” “thinks,” “estimates,” “seeks,” “predicts,” “could,” “projects,” “targets,” “potential,” “likely will” and other similar terms and phrases, are based on the beliefs of the Company’s management, as well as assumptions made by the Company’s management and information currently available to it as of the date of such statements. Such statements are subject to risks and uncertainties, all of which are difficult to predict and many of which are beyond the Company’s control, including, among other things, the following: the outcome of our contingency planning and restructuring activities; settlement discussions or negotiations; the Company’s liquidity, financial performance, cash position and operations; the Company’s strategy; risks and uncertainties associated with Chapter 11 proceedings; the adverse impacts on the Company’s business as a result of filing and operating under Chapter 11; the timing, terms and ability to confirm a sale of the Company’s assets under Section 363 of the United States Bankruptcy Code; the adequacy of the capital resources of the Company’s assets and the difficulty in predicting the liquidity requirements of the operations of the Company’s assets; the unpredictability of the Company’s financial results during Chapter 11 proceedings; the Company’s ability to discharge claims in Chapter 11 proceedings; negotiations with the holders of the Company’s debt and its trade creditors and other significant creditors; risks and uncertainties in enforcing the terms of any agreements with creditors or lenders during the Chapter 11 proceedings; the Company’s ability to conduct business as usual; the Company’s ability to continue to serve customers, suppliers and other business partners with the high level of service and performance they expect from the Company; the Company’s ability to continue to pay employees, suppliers and vendors; the ability to control costs during the Chapter 11 proceedings; adverse litigation; the risk that the Company’s Chapter 11 cases may be converted into cases under Chapter 7 of the Bankruptcy Code; the Company’s ability to secure working capital; the Company’s ability to take advantage of opportunities to acquire assets with upside potential; the Company’s ability to execute its strategic plan to pursue, evaluate and close an asset sale of the Company’s businesses under Section 363 of the United States Bankruptcy Code; our inability to maintain compliance with financial covenants and operating obligations that would expose us to potential events of default under our outstanding indebtedness; our ability to incur additional debt or equity financing for working capital, capital expenditures, business development, debt service requirements, acquisitions or general corporate purposes or otherwise; a significant reduction in our short- or long-term revenues that could prevent us from funding our operations and liquidity needs or repaying indebtedness; and supply chain disruptions or difficulties. Accordingly, the reader is cautioned not to rely on these forward-looking statements.
The Company expressly disclaims any obligation to update these statements, which speak only as of the dates on which such statements are made, except as required by the federal securities laws. For a discussion of other risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, see the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the Company’s other filings with the Securities and Exchange Commission. Such filings are available on the SEC’s website at www.sec.gov and on the Company’s Investor Relations website at https://investors.llflooring.com.
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For media inquiries:
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Joele Frank, Wilkinson Brimmer Katcher
Phone Number: 212-355-4449
Source: LL Flooring Holdings, Inc.
